Stable value for Bitcoin and Ethereum prices, but there is fear

For almost twenty days now, the price values of BTC (Bitcoin) and ETH (Ethereum) have been relatively stable.

Bitcoin’s price rose above $28,000 on 19 March, and since then it has not fallen below $27,000 except for very few moments, and only slightly. It has attempted three times to break above $29,000, but these attempts have all failed.

In other words, it has been hovering in a decidedly narrow range between $27,000 and $29,000 for almost twenty days.

It is worth noting that at the beginning of the year it was below $17,000, and that at the end of January it went above $23,000, only to go above $25,000 on 16 March, three days before it went above $28,000. It is therefore a rise that is not at all linear, interspersed with two declines, one to $21,500 on 10 February, and another below $21,000 on 10 March.

In other words, a rebound began on 11 March that took the price of BTC from under $21,000 to over $28,000 in just eight days. Whereas over the next twenty days it moved very little.

A very similar argument can be made for Ethereum, whose market value has now hovered around $1,800 since 18 March. However, the price of ETH for the past couple of good days has been trying to bring itself back above $1,900, which is a level it had never approached in 2023 until 4 April.

As such, while in the first quarter of the year ETH followed BTC’s fluctuations fairly closely, for the past few days it seems to have been moving independently, probably in anticipation of the Shanghai update scheduled for 12 April. It is common that before a major update such as this one, the price of ETH rises, but then it often falls after the event.

Moreover, in this case the update will unlock the more than 18 million ETH currently locked in staking on the Beacon Chain.

Fears in the markets

Oftentimes, relatively prolonged periods of lateralization such as this one end up breaking suddenly, with strong movements either up or down.

The key moment might just be 12 April, because should the price of ETH fall after the event, as it often does, it could end this period of lateralization with a crash.

What’s more, it is possible that some of the 18 million ETH that will suddenly be unlocked could be withdrawn and sold, although it is not known how many, and this could add selling pressure to what exists already as a result of the “sell the news.”

But there is more.

For the past few days, and particularly since yesterday, fears have also been spreading in traditional markets due to fears regarding recession.

Even though there is no recession at this time, particularly in the US, and there is no data to indicate a fall into recession any time soon, there is instead data to suggest that by the end of the year, or during the next year, things may fall precipitously.

Above all, the problem is the very high interest rates, which may not only not decline but may even rise a little more.

The thing is that several economic data came out yesterday regarding the US that indicate an economy that seems to be starting to suffer a bit. If that suffering was due to the very high interest rates, since it is assumed that they will remain that way for quite a while yet, it is very difficult to imagine how the economic data could improve in the coming months. If anything, they are expected to worsen.

As things stand, it seems unlikely that the Fed can really intervene to break this downward spiral by lowering rates, because it would mean depowering the fight against inflation, which is also still too high.

The price evolution of BTC and ETH

The price evolution of Bitcoin and Ethereum now depends closely on what happens in the global financial and money markets, and particularly in the US.

While the expectations of the Shanghai update could continue to have an impact until 12 April, the situation could change after that event, also due to the release of March inflation data in the US a few days later.

In a climate of fear such as the one that seems to be forming, a decline in prices seems likely, although it will most likely depend on the inflation figures that are released.

For example, inflation in the Eurozone almost collapsed in March, so it is not impossible to imagine a sharp descent in the US as well. However, there was already a sharp drop in the US in February, so it is also possible to imagine that there may not be another one in March.

If the figure is indeed lower than expected, then the Fed may ease its restrictive plans, perhaps not raising rates in May and perhaps beginning to reduce them by year-end. If, on the other hand, it should not be particularly low, the assumption circulating is two more 25-point rate hikes, one in May and the other in June, with no reduction by year-end. In the latter case, market reaction could be negative.